iisd-api-suisse-indonesie-soumission-2bd1f4c08f4942fc.pdf

The International Institute for Sustainable Development (IISD) submitted a consultation response regarding the 2022 Investment Promotion and Protection Agreement (API) between Switzerland and Indonesia. While IISD acknowledges innovations in the treaty—such as stricter investor definitions to prevent 'treaty shopping' and the exclusion of speculative profits from expropriation compensation—it argues that several provisions remain problematic. Key concerns include a climate-neutral definition of investment, the persistence of unpredictable 'legitimate expectations' in the Fair and Equitable Treatment (FET) standard, and the lack of a requirement to exhaust local remedies before pursuing international arbitration. IISD recommends that Switzerland adopt more sustainable investment definitions and strengthen the right to regulate in the public interest in future treaties.

• The 2022 API introduces a strict definition of an investor to limit 'treaty shopping' by requiring three cumulative criteria: place of registration, location of the head office, and the presence of substantial economic activities.
• The definition of 'investment' is considered climate-neutral because it does not distinguish between high-carbon polluting investments and low-emission ones, hindering the phase-out of coal and other fossil fuels.
• The Fair and Equitable Treatment (FET) standard remains unpredictable because the agreement allows arbitral tribunals to consider the 'legitimate expectations of the investor', a concept IISD describes as difficult to grasp.
• The agreement's general exceptions, modeled after Article XX of the GATT, are criticized as ineffective based on recent case law (e.g., Eco Oro v. Colombia), as they may not prevent a state from having to pay compensation for legitimate public health or environmental measures.
• The API includes an innovation that excludes 'speculative or exceptional profits' from the calculation of fair market value when determining compensation for expropriation.
• The Investor-State Dispute Settlement (ISDS) mechanism allows direct access to international arbitration without requiring the exhaustion of local remedies in national courts first.
• Provisions regarding Corporate Social Responsibility (CSR) and anti-corruption are described as merely exhortatory, lacking enforcement mechanisms or legal consequences for violations.
• The agreement's approach to third-party funding is limited to requiring transparency regarding the existence of such funding, without prohibiting speculative financial interests or imposing mandatory sanctions.
• The code of conduct for arbitrers fails to address the 'double hatting' issue, where one person assumes multiple roles (e.g., arbitrator and counsel) across different cases.
• The agreement contains problematic 'survival clauses' that allow the obsolete 1974 API to continue producing legal effects for up to one year after the 2022 agreement enters into force, and provide a 10-year survival period for the new agreement itself.

APA

International Institute for Sustainable Development (n.d.). iisd-api-suisse-indonesie-soumission-2bd1f4c08f4942fc.pdf. https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf

Chicago

International Institute for Sustainable Development. iisd-api-suisse-indonesie-soumission-2bd1f4c08f4942fc.pdf. n.d. https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=iisd-api-suisse-indonesie-soumission-2bd1f4c08f4942fc.pdf |url=https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndiisdapisuisseindonesiesoumission2bd1f4c08f4942fcpdf, author = {{International Institute for Sustainable Development}}, title = {{iisd-api-suisse-indonesie-soumission-2bd1f4c08f4942fc.pdf}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/2022-09/iisd-api-suisse-indonesie-soumission.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }